Employer's guide to hierarchy culture in the workplace plus pros and cons

Characteristics of hierarchy culture

Hierarchy culture definitions center on stability, formal delineation of roles, efficiency, and an ongoing emphasis on order and rules. The key characteristics of hierarchy culture include:

• Clearly defined roles: There is no role confusion in a hierarchical structure. Everyone knows their job and who is in charge. Roles and responsibilities are clear-cut.
• Structured authority levels: Likewise, there is a clear chain of command in this top-down approach and each layer has authority over those below them. Again, there is never any doubt about who is in charge and who has authority in a given situation.
• Emphasis on order and rules: Guidelines are well-established to keep things humming and there is little tolerance for those trying to break the rules or color outside of the lines. Companies with this type of corporate culture like orderly procedures and are not fans of unexpected surprises.

Common examples of hierarchy culture include the military, healthcare organizations, large banks and financial institutions, and schools. Large corporations may also exhibit a hierarchy culture, with McDonald’s, Amazon, and IBM being frequently cited examples.

Next, let’s find out more about the positives that tend to come with this workplace philosophy.

Advantages of hierarchy culture

This formal form of organizational culture does come with some significant advantages. The plus side of hierarchy culture includes:

• Consistency in operations: Customers appreciate a consistent product and many employees also appreciate a consistent workplace. Consistent operations make it easy to measure improvement and the potential need for change, enhance workplace productivity, and grow a reputation as a “great place to work” that attracts top talent. Consistency can also lead to organizational growth and success.
• Streamlined decision-making processes: Organizations that excel at streamlined decision-making can reduce costs while improving employee satisfaction. In fact, organizations with high-quality decision-making processes benefit from 2.5 times higher growth and 30% higher returns on investment than those that lack this ability. With an orderly culture with structured roles, streamlined decision-making happens naturally in a hierarchy culture.
• Opportunities for career advancement: Naturally, employees highly value opportunities to enhance their skills, education, and career prospects. In fact, career growth is the number one reason employees give for leaving a job. Organizations that invest in employee development see significant benefits, including twice the retention rates and 11% higher profitability. Since this workplace culture makes job classes clear, employees recognize when they may be in line for promotion or a new role.

Employers may be wondering what “less-than-ideal” aspects of this methodology to consider.

Disadvantages of hierarchy culture

The cons of hierarchy culture are also clear. They can include:

• Limited employee empowerment: Simply put, employees like to feel empowered to make decisions and do their jobs, and this is not a regular feature of most organizations that exhibit hierarchical culture. Low employee empowerment can reduce overall engagement and productivity while bolstering employee turnover.
• Slow adaptability to change: Hierarchical organizations often have a “this is the way we’ve always done it” attitude. This, in turn, leads to slow adaptability at all levels, as well as the potential to miss out on workplace and industry trends and opportunities. Blockbuster, for instance, missed the boat on the online streaming revolution because they were resistant to change, and the company is not much of a blockbuster anymore.
• Communication barriers among staff: With a strong top-down ethos, the hierarchal culture can reduce effective communication and make it harder for employees and managers to deal with conflict. Other types of organizational cultures are more open to the exchange of ideas, while hierarchy organizational culture is fairly conservative in terms of information-sharing.

Next, let’s find out more about how to introduce this type of workplace philosophy into your organization without missing a beat.

How to balance hierarchy with employee engagement

Fortunately, successful organizations of all sizes can effectively balance the dual goals of hierarchical culture with strong employee engagement. This art can be managed by:

• Encouraging feedback and participation: The best companies actively encourage feedback and participation, even hierarchical ones. In a recent poll, 80% of workers who had received meaningful feedback in the past week reported feeling engaged at work. Seek out and listen to employee input, whether through regular surveys, in-person brainstorming sessions, or online feedback options.
• Fostering a culture of innovation: Innovation is a top priority among growth-minded companies and employees alike. You can foster innovation through new training efforts, open communication outlets and opportunities, encouraging experimentation even in small amounts, promoting teamwork rather than siloes, offering forums for new ideas, and rewarding successful innovations in the workplace.
• Implementing flexible structures within the hierarchy: Hierarchical organizations sometimes feel like a one-size-fits-all situation, however, flexibility can go a long way in creating a positive and innovative work environment. Whenever and wherever possible, give employees at lower levels of the organization a chance to impact and make decisions. Offer flexible work plans and hours. Promote more collaboration across departments and levels. Your organization can still maintain order even when it welcomes a dose of flexibility.